EUR/USD Reverses Gains
The dollar bounced off of two-year lows this morning as U.S. data pointed to a firm manufacturing activity, which led to the EUR/USD losing some steam after reaching its highest level since 2018.
We, therefore, sold EURUSD at 1.1897 with SL at 1.2025 and TP1: 1.1785, TP2: 1.1615, TP3: 1.1450. The EUR shows weakening potential on profit-taking but we also see fresh momentum in the Greenback. Having hit the psychological resistance of 1.20 the market could break lower offering more growth for the Greenback.
In the meantime, technical indicators remain in overbought areas which suggest at least a mild correction lower that we’d like to use to leverage on this trade. After a bullish start this Monday, the time could be just right to see bearish trends in the EUR/USD before we head into the NFP release this Friday.